A drop in mortgage interest rates in November led to a welcome boost in mortgage demand, which has risen to a five-month high. That should provide some support to home sales over the next month or two. New home sales dropped to a 2½-year low in October, which has contributed to a sharp drop in homebuilder confidence. But slowing home sales and strong household formation have supported rental demand. While house price growth has been slowing since March, rental growth on the CPI measure held at 3.6% y/y in October, a rate it has maintained since May.
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